FLIR Systems Reports Fourth Quarter And Full Year 2004 Financial Resul

FLIR Systems Reports Fourth Quarter And Full Year 2004 Financial Results; Full Year Net Earnings Rise 60% on 55% Increase in Revenue; Results Reflect Two-For-One Stock Split

    Business Editors/High-Tech Writers

    PORTLAND, Ore.--(BUSINESS WIRE)--Feb. 2, 2005--

Company Reiterates Fiscal 2005 Financial Outlook
    FLIR Systems, Inc. (NASDAQ:FLIR) announced today that net earnings for the fourth quarter ended December 31, 2004 increased 61% to $24.1 million, or $0.31 per diluted share, after giving effect to the two-for-one stock split effective as of February 2, 2005. This compares to net earnings for the fourth quarter of 2003 of $15.0 million, or $0.21 per diluted share when adjusted for the two-for-one stock split, and the effect of the assumed conversion of the Company's convertible notes. Revenue for the 2004 fourth quarter increased 48% to $143.7 million, up from $97.4 million for the fourth quarter of 2003. Revenue at the Company's Imaging division increased 55%, while revenue at the Company's Thermography division increased 36% as compared to the fourth quarter last year.
    For the twelve months ended December 31, 2004, net earnings rose 60% to a record $71.5 million, or $0.94 per diluted share, compared to net earnings for the full year 2003 of $44.7 million, or $0.62 per diluted share, both when adjusted for the two-for-one stock split, and the effect of the assumed conversion of the Company's convertible notes. Revenue for 2004 was $482.7 million, an increase of 55% from the $312 million generated in 2003. Revenue from the Company's Imaging division increased by 65%, while revenue from the Company's Thermography division increased by 37% compared to the prior year.
    Cash generated from operations totaled $14.5 million for the fourth quarter and $75.1 million for 2004. At 12/31/2004 the Company had cash on hand of $120.7 million.
    The backlog of firm orders for delivery within the next twelve months was approximately $159 million at December 31, 2004 as compared to $146 million at December 31, 2003.
    "2004 was another excellent year for FLIR. We achieved record revenue and net earnings as both of our divisions grew strongly. We also made progress toward many of our longer term objectives, including the integration of Indigo Systems, which was acquired last January, and the expansion of our global Thermography distribution network," commented Earl R. Lewis, President and CEO of FLIR. "Looking to 2005, we expect growth to moderate somewhat from the very rapid pace of 2004, but remain strong. We are thus reiterating our outlook for 2005 revenue and earnings per share. Our current expectation is for full year revenue in the range of $545 to $560 million, and net earnings in the range of $1.12 to $1.18 per fully diluted share, after giving effect to the two-for-one stock split effective today. We are very proud of FLIR's accomplishments in 2004 and are excited about the prospects for 2005 and beyond," he concluded.

    Forward-Looking Statements

    The statements in this release by Earl R. Lewis regarding the Company's expectation of moderating but continued strong growth and its outlook for 2005 as to revenue and net earnings per share are forward-looking statements. Such statements are based on current expectations, estimates and projections about the Company's business based, in part, on assumptions made by management. These statements are not guarantees of future performance and involve risks and uncertainties that are difficult to predict. Therefore, actual outcomes and results may differ materially from what is expressed or forecasted in such forward-looking statements due to numerous factors, including the following: changes in demand for the Company's products, product mix, the timing of customer orders and deliveries, the impact of competitive products and pricing, the Company's continuing compliance with US export control laws and regulations, constraints on supplies of critical components, excess or shortage of production capacity, actual purchases under agreements, the continuing eligibility of the Company to act as a federal contractor, the amount and availability of appropriated government procurement funds and other risks discussed from time to time in the Company's Securities and Exchange Commission filings and reports. In addition, such statements could be affected by general industry and market conditions and growth rates, and general domestic and international economic conditions. Such forward-looking statements speak only as of the date on which they are made and the company does not undertake any obligation to update any forward-looking statement to reflect events or circumstances after the date of this release.

    Conference Call

    FLIR has scheduled a conference call at 11:00 am EST today. A simultaneous webcast will be available from the Investor Relations link at www.FLIR.com. A replay will be available after 1:00 PM EST at this same internet address. For a telephone replay, dial 800-633-8284, reservation #21230155, after 1:00 PM EST.

    About FLIR Systems

    FLIR Systems, Inc. is a world leader in the design, manufacture and marketing of thermal imaging and stabilized camera systems for a wide variety of thermography and imaging applications including condition monitoring, research and development, manufacturing process control, airborne observation and broadcast, search and rescue, drug interdiction, surveillance and reconnaissance, navigation safety, border and maritime patrol, environmental monitoring and ground-based security. Visit the company's web site at www.FLIR.com.

FLIR SYSTEMS, INC.

CONSOLIDATED STATEMENTS OF INCOME (In thousands, except per share amounts)

Three Months Ended Twelve Months Ended December 31, December 31, ------------------ --------------------- 2004 2003 2004 2003 --------- -------- ----------- --------- (unaudited) (unaudited)

Revenue $143,726 $97,414 $482,651 $311,979

Cost of goods sold 67,991 46,044 233,492 146,454 --------- -------- ----------- --------- Gross profit 75,735 51,370 249,159 165,525

Operating expenses: Research and development 13,090 9,027 45,796 30,665 Selling, general and administrative 28,254 19,515 94,237 65,034 --------- -------- ----------- --------- Total operating expenses 41,344 28,542 140,033 95,699

Earnings from operations 34,391 22,828 109,126 69,826

Interest expense 2,031 1,999 8,092 4,861 Other expenses, net 88 702 1,125 1,117 --------- -------- ----------- ---------

Earnings before income taxes 32,272 20,127 99,909 63,848

Income tax provision 8,210 5,164 28,414 19,155 --------- -------- ----------- ---------

Net earnings $24,062 $14,963 $71,495 $44,693

========= ======== =========== =========

Net earnings per share: Basic $0.35 $0.23 $1.06 $0.66

--------- -------- ----------- --------- Diluted $0.31 $0.21 $0.94 $0.62

========= ======== =========== =========

Weighted average shares outstanding: Basic 68,709 65,670 67,566 67,462 --------- -------- ----------- --------- Diluted 81,972 78,092 81,108 75,552 --------- -------- ----------- ---------

All per share amounts have been adjusted to reflect the two-for-one stock split and the effect of the restatement for the assumed conversion of the convertible notes.

FLIR SYSTEMS, INC.

CONSOLIDATED BALANCE SHEETS (In thousands, except par value)

December December 31, 2004 31, 2003 ----------- --------- ASSETS (unaudited) ------

Current assets: Cash and cash equivalents $120,692 $197,993 Accounts receivable, net 116,258 79,332 Inventories, net 98,258 75,959 Prepaid expenses and other current assets 21,769 19,997 Deferred income taxes, net 9,771 8,832 ----------- --------- Total current assets 366,748 382,113

Property and equipment, net 34,778 22,758 Deferred income taxes, net 12,573 21,146 Goodwill 149,475 12,500 Intangible assets, net 47,180 4,036 Other assets 8,691 7,870 ----------- --------- $619,445 $450,423 =========== =========

LIABILITIES AND SHAREHOLDERS' EQUITY ------------------------------------

Current liabilities: Accounts payable $32,321 $26,427 Deferred revenue 7,188 4,540 Accrued payroll and related liabilities 22,375 12,778 Accrued product warranties 5,465 3,511 Advance payments from customers 5,009 12,112 Other current liabilities 10,585 8,227 Accrued income taxes 5,626 2,742 Current portion of long-term debt 105 -- ----------- --------- Total current liabilities 88,674 70,337

Long-term debt 205,335 204,369 Pension and other long-term liabilities 12,263 10,875

Commitments and contingencies

Shareholders' equity 313,173 164,842 =========== ========= $619,445 $450,423 =========== =========

--30--JC/la*

CONTACT: FLIR Systems, Inc. Anthony Trunzo, 503-684-3731 www.flir.com or Neil Berkman Associates (Investor Contact) 310-277-5162 info@BerkmanAssociates.com

KEYWORD: OREGON INDUSTRY KEYWORD: HARDWARE SOFTWARE AEROSPACE/DEFENSE GOVERNMENT EARNINGS CONFERENCE CALLS SOURCE: FLIR Systems, Inc.

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